Sebi bars 3 companies, 10 individuals for illegal fund raising activities

Regulator Sebi on Friday barred three companies and ten individuals from the securities market for illegally raising money from investors in the name of investments for teak trees.

Prime Plantations Pvt Ltd (PPPL), Adhunik Plantations Pvt Ltd (APPL) and Twentieth Century Plantation Pvt Ltd (TCPL) as well as ten individuals, including present and past directors of these companies, have been banned.

The companies and four individuals have been barred for four years from the securities market from the date of completion of the refunds to the investors, as per a Sebi order.

Further, the companies have been directed to wind up their Green Chip Scheme and refund the money.

Six other individuals have been slapped with a two-year ban from the date of the order issued on Friday.

The watchdog examined the business activities of the companies for the period from 1992 to 2019. It was found the companies launched identical schemes namely 'Green Chip Scheme', under which investors were given the option to invest Rs 7,500 and multiples thereof for a unit of five teak trees or multiples thereof, in PPPL and APPL.

Whereas in TCPL, a minimum investment of Rs 5,000 and multiples thereof was offered to the investors.

Sebi said it does not appear that these companies were actually entering into a sale transaction of teak trees while mobilising investments from the respective investors.

Money was raised from the investors by making them subscribe to the schemes and not by selling any teak trees as has been propounded by them, it added.

Further the regulator said the scheme was being run without obtaining registration from it.

Under the said schemes, Rs 11.57 lakh, Rs 12.06 lakh and Rs 3.42 lakh have been mobilised by PPPL, APPL and TCPL, respectively, as per the order. This was in violation of Collective Investment Schemes (CIS) regulations.

Among other directions, the companies and the present directors have been asked to not divert any funds raised from public at large.

According to another order passed on Friday, Sebi restrained 23 entities from accessing securities market for indulging in fraudulent trading activities into the shares of Sunstar Realty Development Ltd. The ban is for a period ranging from six months to one year.

In another order, the watchdog imposed a market ban on six entities and one individual for a period ranging from six months to one year for indulging in fraudulent trade practices in the scrip of Nouveau Global Ventures Ltd.